Apple Is What Ails Big Stock ETFs, Not the Fiscal Cliff

By Brendan Conway

The SPDR S&P 500 ETF (SPY) is up a hair since the election. Pundits have been yakking nonstop about Washington’s fiscal cliff since then. Clearly the two must be related.

Or not. Apple (AAPL) is down about 10% since the election. The stock makes up nearly 4% of the S&P 500 ETF, which is more than twice the size of either General Electric (GE) or Chevron (CVX) in the benchmark. If you’re going to blame anything for the late-year stock-market lull, blame Apple.

Murray Coleman, formerly of this blog, makes all these points and more over at the WSJ. Murray also notes the poster-child for the Apple effect: The PowerShares QQQ (QQQ), with more than 18% Apple, and down 7%. The weighting is about equal to the next three biggest stocks in the index, Microsoft (MSFT), Google (GOOG), and Oracle (ORCL).

If you expect an Apple rebound, then load up. But here’s something to warrant caution: What would the S&P ETF look like if and when the fiscal cliff takes its bite?

If we can infer that the market hasn’t priced in anything but good news when it comes to the fiscal cliff — and yes, we can infer that — then this means things are all the likelier to get ugly if we do end up with bad news.

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There are 10 comments

DECEMBER 26, 2012 3:08 P.M.

Anonymous wrote:

"Apple Is What Ails Big Stock ETFs, Not the Fiscal Cliff"
Don't be a dork. It is the fiscal cliff that ails Apple and in turn Big Stock ETF's.

DECEMBER 26, 2012 3:31 P.M.

Anonymous wrote:

It's pretty clear to anyone with any insight that AAPL shares aren't being bought or sold based on reaction to the "news" of fiscal cliff talks… they're being sold based on the bet that taking profits this year will be less costly than taking them next year, even if the fiscal cliff is "avoided."

You can expect to see AAPL do a big rubber band rebound in January, and stocks like RIMM and FB tank (as folks are looking to defer losses until 2013, when it they'll help to offset higher capital gains on their profits for next year). Everything is backwards this go around.

DECEMBER 26, 2012 4:00 P.M.

Anonymous wrote:

LOAD UP ON AAPL. RECORD QUARTER COMING NEXT 3 QUARTERS

DECEMBER 26, 2012 4:01 P.M.

KATHY HARPER wrote:

THERE IS NOTHING WRONG WITH APPLE AS A COMPANY .THEY MAKE MORE MONEY THAN ANY COMPANY IN THE WORLD !!

DECEMBER 26, 2012 4:03 P.M.

RANDY WILHELM wrote:

Apple stock is a steal right now! Anyway you cut it, anyway you look at it, Apple is cheap and everyone should ownstock in AAPL. AAPL is going to have three huge quarters in a row

DECEMBER 26, 2012 5:16 P.M.

anonymous wrote:

Besides the fanboys hoping to recoup their losses on their apple stock, everyone else knows that apple is getting clobbered on market share all over the world. They're down to 15% of worldwide smartphone sales. They've already lost half the market in tablets. Google has beaten them to the integrated TV with deals with LG, Sony, & Logitech already in place. And all this is before Windows 8 takes hold, which is far better, far more integrated operating system than anything apple has ever produced, and that's not even taking into consideration the coming Xbox 720 that will run on the Windows 8 OS and integrate TV, Gaming, and productivity software together. Apple is surrounded by enemies and losing ground at an accelerating rate because of their own arrogance, closed system and, products inferior to Samsung, Nokia and, Motorola. These are the troubles for apple stock - not fiscal cliff or profit taking.

DECEMBER 26, 2012 5:29 P.M.

David wrote:

That's a ridiculous thing to say. AAPL has been lifting the whole market up for years (You'd even think they're down this year, even though they are still up way above the SP 500.) And now because Apple is up "only" ~30% from year to day and not 70%, it's ailing the market?

I honestly do not mean to insult the author here. But you also have to be a bit responsible when discussing such things.

P.S. I'm not even an AAPL holder. Too volatile for me right now, but still what you're saying has no merit.

DECEMBER 26, 2012 5:49 P.M.

john hayes wrote:

FISCAL CLIFF HAS BEEN BETTING US DOWN ..WHERE HAVE YOU BEEN? APPL JUST HAS THE LARGES GROWTH IN THE PAST YEARS..WHAT BUY OBAMA STOCKS? PLEASE

DECEMBER 28, 2012 2:17 A.M.

Sebastian wrote:

Vippennystocksite dotcom, is a perfect place for QQQ stock

DECEMBER 28, 2012 6:21 A.M.

Ptmmac wrote:

Apple is in the most competitive market in the world. It is also the most profitable company in that market. The real question is will they be able to continue to keep pulling rabbits out of their hat? 2013 will be when we find out. As far as the stock goes this is a normal movement downward because they have a new product cycle every year. This cycle will continue to happen because the company has to make a new batch of products. The trend right now in data for the first quarter of 2013 is very positive. I expect Apple to go back up in January unless the ideologues in congress keep playing with each other and rally do damage the economy.

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